Section 2-214 - Fractional shares. - Maryland Statutes

§ 2-214. Fractional shares.
 

(a)  In general.- A corporation may, but is not obliged to: 

(1) Issue fractional shares of stock; 

(2) Eliminate a fractional interest by rounding up to a full share of stock; 

(3) Arrange for the disposition of a fractional interest by the person entitled to it; 

(4) Pay cash for the fair value of a fractional share of stock determined as of the time when the person entitled to receive it is determined; or 

(5) Issue scrip or other evidence of ownership which: 

(i) Entitles its holder to exchange scrip or other evidence of ownership aggregating a full share for a certificate which represents the share; and 

(ii) Unless otherwise provided, does not entitle its holder to exercise voting rights, receive dividends, or participate in the assets of the corporation in the event of liquidation. 

(b)  Board may impose conditions on scrip.- The board of directors may impose any reasonable condition on the issuance of the scrip or other evidence of ownership, including a condition that: 

(1) It becomes void if not exchanged for a certificate representing a full share of stock before a specified date; 

(2) The corporation may sell the stock for which the scrip or other evidence of ownership is exchangeable and distribute the proceeds to the holders; or 

(3) The proceeds of a sale under paragraph (2) of this subsection are forfeited to the corporation if not claimed within a specified period not less than three years from the date the scrip or other evidence of ownership was originally issued. 
 

[An. Code 1957, art. 23, § 28; 1975, ch. 311, § 2; 1985, ch. 10, § 3; 2009, chs. 295, 296.]